Correlation Between Assembly Biosciences and Ocular Therapeutix
Can any of the company-specific risk be diversified away by investing in both Assembly Biosciences and Ocular Therapeutix at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Assembly Biosciences and Ocular Therapeutix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Assembly Biosciences and Ocular Therapeutix, you can compare the effects of market volatilities on Assembly Biosciences and Ocular Therapeutix and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Assembly Biosciences with a short position of Ocular Therapeutix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Assembly Biosciences and Ocular Therapeutix.
Diversification Opportunities for Assembly Biosciences and Ocular Therapeutix
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Assembly and Ocular is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Assembly Biosciences and Ocular Therapeutix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocular Therapeutix and Assembly Biosciences is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Assembly Biosciences are associated (or correlated) with Ocular Therapeutix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocular Therapeutix has no effect on the direction of Assembly Biosciences i.e., Assembly Biosciences and Ocular Therapeutix go up and down completely randomly.
Pair Corralation between Assembly Biosciences and Ocular Therapeutix
Given the investment horizon of 90 days Assembly Biosciences is expected to under-perform the Ocular Therapeutix. In addition to that, Assembly Biosciences is 1.42 times more volatile than Ocular Therapeutix. It trades about -0.32 of its total potential returns per unit of risk. Ocular Therapeutix is currently generating about -0.27 per unit of volatility. If you would invest 874.00 in Ocular Therapeutix on November 3, 2024 and sell it today you would lose (104.00) from holding Ocular Therapeutix or give up 11.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Assembly Biosciences vs. Ocular Therapeutix
Performance |
| Timeline |
| Assembly Biosciences |
| Ocular Therapeutix |
Assembly Biosciences and Ocular Therapeutix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Assembly Biosciences and Ocular Therapeutix
The main advantage of trading using opposite Assembly Biosciences and Ocular Therapeutix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Assembly Biosciences position performs unexpectedly, Ocular Therapeutix can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ocular Therapeutix will offset losses from the drop in Ocular Therapeutix's long position.| Assembly Biosciences vs. Spero Therapeutics | Assembly Biosciences vs. Achilles Therapeutics PLC | Assembly Biosciences vs. Instil Bio | Assembly Biosciences vs. CytomX Therapeutics |
| Ocular Therapeutix vs. CytomX Therapeutics | Ocular Therapeutix vs. Assembly Biosciences | Ocular Therapeutix vs. Spero Therapeutics | Ocular Therapeutix vs. Achilles Therapeutics PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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